Another error in the law of freedom of choice lies in the “doctrine of fusion”. If an agent and his principal can be sued against a contract (according to the interpretation of the agency contract), the doctrine of the merger, according to RMKRM against MRMVL (1926), requires that the third party decide which of the two he wishes to pursue, he cannot sue both. If a judgment is rendered against the elected party, that judgment cannot be enforced (for example, if the defendant becomes insolvent or disappears), the third party cannot sue the other party. This happened in Priestly v Fernie (1863) and seems potentially very damaging to third parties simply because a judgment is binding on its pronouncement, unlike enforcement (normally in case of taking money). However, the law remains in force. The unidentified agency is treated as an undisclosed agency, since a third party cannot exercise rights against an unidentified person, according to The Frost Express ; although some have argued that this rule should be replaced by the obligation for an agent to disclose the identity of its unnamed contracting entity within a reasonable time after notification of the procedure. As a general rule, the “Commission agency” is not considered an agency, since the agent acts in his own name and retains all the profits made as traders, but also respects the obligations towards the goods he sells. Whether or not the authorised representative is revealed has repercussions on whether the goods or services are considered to be supplied for VAT purposes. The place of supply of the goods or services has an impact on the registration of the turnover TAX and on the ongoing compliance obligations of both the contracting authority and the representative. The Agency`s undisclosed doctrine may also be excluded if the officer signs a contract entered into in a manner inconsistent with the doctrine. In Drughorn , it was not incompatible for an agent to qualify as a charterer, but in Humble v Hunter (1842), an agent who qualified as an owner was not compatible with the doctrine: there could be no unknown principle. This is useful if the contract concerns the property of the client not mentioned, for example. B the sale of a single asset.
Here, the agent has no right to manage this asset, except as an agent – nemo dat quod non – so the law must recognize an agency for the contract to be useful to an innocent buyer. The undisclosed agency could be imitated through the use of an agent and the creation of privileges or the use of a reseller, but since the agency was developed in accordance with the common law long before the questions of privilege were recognized, it is assumed that this is the reason why there is an undisclosed agency. A trader would also encourage the “principal” to take a greater risk. The case highlights the right of a procuring entity to enforce a contract entered into on its behalf by an agent, under which the counterparty`s agency relationship is known, and the possibility that a designated party entering into a contract as an agent is not actually a party to it. Even if the counterparty is not aware of the agency relationship (and the existence of the principal), the contracting entity can still enforce the contract. Designated parties should be aware of these possibilities and, if they wish to exclude them, clearly provide for this in the treaty. The concepts of the disclosed and undisclosed Agency have already been briefly mentioned. The undisclosed agency is the usual type of agency where a third party knows they are working through an agent. In an undisclosed agency, a third party does not know whether they are working through an agent or not.
According to Cooke &Sons v Eshelby (1887), where an agent acts sometimes for a principal and sometimes for his own account, an agreement should be treated as if it were executed within an undisclosed agency. . . .